German Train Drivers Threaten Unlimited Strikes

Germany faces the prospect of unlimited rail strikes this week that could inflict serious damage to Europe's largest economy and even hurt neighbouring countries.

Locked in a long-running pay dispute with Deutsche Bahn, Germany's GDL train drivers' union has threatened to launch strikes that will last indefinitely over the coming week if the national rail operator does not improve a wage offer for the union's 34,000 members.

Germany experienced the biggest rail strike in its history last week when GDL staged a 62-hour walk-out that left millions of people battling to get to work on time, and brought goods transport to a standstill across large swathes of the country.

According to German media reports at the weekend, Deutsche Bahn is preparing to make the drivers a new offer, but GDL boss Manfred Schell said he had received nothing so far. GDL has given the company until Monday to come up with a better deal.

GDL argues the train drivers are underpaid compared to their European counterparts and wants a separate pay contract from other rail workers, plus a raise of up to 31 percent.

EU Weighs in

Deutsche Bahn has offered a pay increase of up to 10 percent but has resisted granting the drivers a separate contract, arguing it would encourage other professions to try to exploit their economic leverage to secure excessive raises.

Politicians in Germany have so far refused to take sides in the dispute, calling only for a quick resolution.

On Sunday, the European Union weighed into the debate, with EU Transport Commissioner Jacques Barrot telling newspaper Bild am Sonntag a long strike could be dangerous for Europe.

"(It) could damage the economy, not just in Germany and France, but also in neighbouring countries," he said. "I hope the two sides reach a deal via quick and fair negotiations -- without waiting for the state to intervene."

The total cost of the stoppages so far, first staged in July, was at least 75 million euros ($110 million), according to data from Germany's DIW economic think tank, Bild am Sonntag reported.

Huge Cost

Karlheinz Schmidt, managing director of Germany's freight transport and logistics federation (BGL), told German radio his lobby had calculated that after about a week an unlimited rail strike would cost the economy 500 million euros a day.

"If it's allowed to go on for two or three weeks, this sum could easily rise to two billion. That would mean if the strike went on till Christmas we'd have no growth this year," he said.

Using emergency measures, Deutsche Bahn has so far tried to ensure its main clients -- like the automobile, chemicals and shipping industries -- were not affected, he added.

"You need to remember that the Bahn makes roughly 80 percent of its turnover from only 300 clients," Schmidt said.

The strike coincides with efforts by the government to finalise a plan to partly privatise Deutsche Bahn. The ruling coalition wants to list the company by 2009, but has not been able to agree on what model to use for the privatisation.

Contact Europe: Economy

CNBC NEWSLETTERS

Get the best of CNBC in your inbox

Please choose a subscription

Breaking News

CNBC's latest news headlines

Morning Squawk

Daily before the bell news roundup

Evening Brief

Daily recap of the day's top headlines

Guest Alerts

Guest information & reminders for your calendar

Your Wealth

Weekly advice on managing your money

Options Action

Insight from the Options Action panel

Please enter a valid email address

To learn more about how we use your information,please read our Privacy Policy.